Flag cumbersome process, multiple documentation under new regime.
Urging India to respect reciprocal privileges, diplomats posted in New Delhi have complained to the Ministry of External Affairs (MEA) that the new GST regime altered the tax-exempt status of the foreign missions.
The change of status and other issues were addressed at a workshop organised by the MEA recently, even as the ambassadors complained that the GST regime threatened the confidential nature of diplomacy.
“Pre-GST, diplomats based in India were entitled to tax-exemption at the point of purchase of goods. Post-GST tax exemption status is altered as now missions have to pay tax first and claim it later from the Government of India. This process increases office work and multiplies avoidable expenditure,” said Ambassador of Mali Niankoro Yeah Samake, who explained that the tax exempt status of diplomatic missions is part of the reciprocal system that Indian missions enjoy abroad.
Ambassador Samake explained that the situation needed urgent remedial measures from the Ministry of Finance and the MEA.
During the workshop held on October 10 by Commissioner for GST Upender Gupta, Chief of Protocol of the MEA Sanjay Verma and the Dean of the Diplomatic Corps and Ambassador of the Dominican Republic Hans Dannenberg Castellenos, a new system based on Unique Identification Numbers (UIN) were presented before the diplomats from missions and multilateral agencies. Officials explained that there would be “no upfront exemption” for supplies from outside or inside Indian territory under the UIN-based system, which means missions will pay GST first and then seek refund later.
“The issue of refunds was one of the questions raised at the workshop and the officials made a detailed presentation,” said Mr. Castellenos, who lauded the MEA for holding the workshop.
However, a senior ambassador, who did not wish to be named, said that under GST, countries with multiple missions would have to spend twice while importing goods or commodities under the UIN system as a country with an embassy as well as a consulate would have to acquire different UIN numbers for the embassy as well as the consulate(s). “Earlier, a country with a consulate in Mumbai or Kolkata could import goods through a port of Maharashtra and West Bengal and send it to its embassy in Delhi but now two different tracks are needed as two separate UIN numbers will be operational during the same process,” said the ambassador.
The Ambassador explained that the UIN system also infringes on confidentiality of diplomatic practices and privacy of foreign diplomats posted in India.
He also said the presentation by the officials from the GST Council and the MEA did not help matters as the procedure continues to remain cumbersome.
“We hope the government of India will address these issues fast as these are reciprocal gestures that we also offer Indian missions abroad,” said the ambassador of Mali urging a simplified system.